Goldman Sachs senior strategist warns stocks could see ‘considerable’ pre-election downside that isn’t being factored into models

Abby Joseph Cohen


  • Goldman Sachs’ Abby Joseph Cohen told Bloomberg on Thursday that markets could see “considerable downside” before the election due to factors that financial models aren’t picking up. 
  • These factors include the outcome of the election and what Congress and the president will do next before election day, Cohen said. 
  • The senior investment strategist added that the market is vulnerable to volatility and disappointment given the”wide gaps” in the relative valuation of stocks.

Goldman Sachs’ Abby Joseph Cohen told Bloomberg on Thursday that markets could soon see “considerable downside” based on factors that financial models cannot predict.

What Congress will do next, what the president will say, and how the election will end cannot be forecasted by modeling, the senior investment strategist said.

“Those of us who have lived our professional lives really focusing in on the math, I think should feel very humble right now,” Cohen said. “Because what we recognize is that the models may not be able to properly reflect all of the volatility not just in the markets, but in the economy, in policy, and of course in investor sentiment.”

Read more: Warren Buffett’s Berkshire Hathaway shocked investors with its Snowflake and Barrick Gold bets. A veteran shareholder explains why they might be part of a new strategy

While Cohen said that it’s not unusual for volatility to rise before an election, there’s also been “erratic movement” with regard to fiscal policy. Stocks quickly sold off on Tuesday after Trump tweeted that negotiations for the next stimulus plan would be halted until the election. 

The famed strategist also said there are “wide gaps” in the relative valuation of stocks. Just a handful of stocks drove the market’s record rally following its March lows. Cohen said this can make the market more volatile, and

California’s mandate to sell only zero-emissions vehicles by 2035 isn’t as crazy as critics think

Last week, California Governor Gavin Newson leaned over the hood of a Ford Mustang Mach-E and signed an executive order saying that all new passenger cars and trucks sold in the state must be emission-free by 2035.



a toaster oven sitting on top of a car: A detail view is seen of an Hyundai Kona Electric Highlander ahead of the Electric Vehicle Show 2019 at Sydney Olympic Park on October 25, 2019 in Sydney, Australia. Electric vehicles are being bought in greater numbers in Australia, with 2017 seeing a 67% increase in sales from the previous year. The largest EV test ride event will be open to public on October 26 and 27th. (Photo by Mark Kolbe/Getty Images)


© Mark Kolbe/Getty Images
A detail view is seen of an Hyundai Kona Electric Highlander ahead of the Electric Vehicle Show 2019 at Sydney Olympic Park on October 25, 2019 in Sydney, Australia. Electric vehicles are being bought in greater numbers in Australia, with 2017 seeing a 67% increase in sales from the previous year. The largest EV test ride event will be open to public on October 26 and 27th. (Photo by Mark Kolbe/Getty Images)

The new mandate doesn’t necessarily mean that California car dealers would, literally, sell nothing but fully electric or hydrogen-powered vehicles 15 years from now, several experts say.

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That is the goal, though. And it’s not entirely out of the question, said Nick Albanese, a researcher with Bloomberg New Energy Finance.

“I think California’s target is ambitious, but feasible,” he wrote in an email. “Even before this announcement, we forecast passenger EVs to account for 52% of total US passenger vehicle sales in 2035 and 61% in 2040.”

Of course, there are many hurdles to overcome on the road to an emission-free auto market, including a widely available charging infrastructure, affordability, and lots of legal fine points.

With 15 years until the mandate goes into effect, there’s plenty of time for negotiation, and we will likely see Newsom’s goal softened or the deadline extended, said Chelsea Sexton, an analyst who covers the electric vehicle market.

“It will take a few years, literally, for this headline to be clarified,” she said.

Can California legally do this?

The federal government’s Environmental Protection Agency has already publicly challenged Newsom

‘Minecraft Kirby’ isn’t real, but that’s not stopping the internet

Any time a new Super Smash Bros. Ultimate character is announced, one of the first things people ask isn’t how the fighter plays. Instead, people demand to know what the ever-gluttonous Kirby will look like once he inhales them and copies the new character’s power. And so, shortly after Minecraft Steve’s Smash Bros. reveal, screenshots of what seemed to be a blocky Kirby started going viral.





© Image: Nintendo via Jory Satana


Here’s the bad news. It’s not real. The images floating around right now all seem to hail from a two-year-old Wii U mod made by Jory Satana that adds a more pointy version of our puffball to the platform fighter. Already, there’s a comment under the mod posted on Thursday that reads, “well, sakurai did it.”

Despite this sad truth, the internet’s gears are in hyperdrive. Many are expressing love for “Minecraft Kirby,” or drawing up fan art that uses the mod’s art style as inspiration for their depictions. Others are content with just cracking jokes about what Minecraft Kirby will inevitably look like. And some are just riffing off the possibilities of a cuboid friend.

There’s always the possibility, of course, that the modded Minecraft Kirby turns out to be weirdly prescient about how Nintendo’s official version will end up looking like. If nothing else, I’m sure that the real Minecraft Kirby will be plenty cute, even if he’s exactly the way we imagined he would be.

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The Google Pixel couldn’t win at the high end, but the midrange isn’t any easier

Today, Google will announce the Pixel 5 and 4A 5G. Well, not so much “announce” as launch, since the company already told us these phones were coming when it announced the Pixel 4A in early August. We know what to expect because these phones have leaked every which way but Sunday. And Google has already told us what the Pixel 4A 5G will cost, too: $499.

About the only thing that isn’t widely confirmed as of this writing (late last night) is the pricing for the Pixel 5. There are strong rumors that it will clock in at $699, which lines up with the big takeaway I expect to come away with today. That would be this: Google is retrenching into the midrange this year instead of directly trying to compete with the flagships from Apple and Samsung.

Moving down in price would be more true to what the Pixel is. But when it comes to Pixel hardware, no good deed goes unpunished. The midrange market Google is presumably headed towards has recently filled up with competitors that either beat the Pixel 5’s rumored price, beat it on rumored specs, or both.

The Samsung Galaxy S20 FE is sitting on my desk right now and after just a couple of days I can already say it’s a very good deal for $699. The OnePlus 8 regularly sells for $599 these days and its cheaper Nord phone is also likely to come to the US in some configuration. Plus, of course, the iPhone 11 is $699 and it’s likely that there will be a new iPhone in the same price class soon enough.

Even so, it’s a smart move to head into the midrange. Expectations of perfection in every category are lower and frankly I don’t think there’s as much appetite